* Many China mills in "holiday mode" ahead of Lunar New Year
* But some traders may be trying to keep market firm -trader
By Manolo Serapio Jr
MANILA, Jan 25 (Reuters) - Steel and iron ore futures in China rose for a second day on Wednesday, supported by hopes that demand for both commodities will strengthen after the Lunar New Year holiday.
Trading activity in the physical iron ore market has been slow ahead of the week-long break that starts on Friday, but spot prices have edged higher.
"I think some traders may be trying to push up the market, hoping to sustain that sentiment after the holiday when mills should be rebuilding stocks," said a Shanghai-based iron ore trader.
"We haven't seen much activity from our customers and many mills have been in holiday mode since the beginning of this week."
The most-active iron ore on the Dalian Commodity Exchange DCIOcv1 was up 1.3 percent at 641.50 yuan ($93) a tonne by midday.
On the Shanghai Futures Exchange, the most-traded rebar SRBcv1 also rose 1.3 percent, to 3,304 yuan per tonne.
Both commodities have gained more than 10 percent this month to build on last year's rally, largely spurred by China's efforts to tackle a chronic glut in its steel sector.
Much of January's gains came after China said it would shut all producers of low-quality steel products by the end of June as Beijing also fights heavy pollution.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB climbed 1.9 percent to $82.69 a tonne on Tuesday, according to Metal Bulletin.
($1 = 6.8778 Chinese yuan)